Investor confidence in Ghana up; Thanks to ITLOS ruling

Investor confidence in the upstream petroleum sector has shot up following Ghana’s recent victory at the International Tribunal for the Laws of the Sea (ITLOS).

According to the Minister of Energy, Mr Boakye Agyarko, the definite nature of the decision, which favoured Ghana against Cote d’Ivoire over a maritime boundary dispute, had contributed towards whipping up investor confidence and interest in the upstream petroleum sector.

He said the confidence was so confounding that investors had expressed interest in developing the Saltpond oilfields.

Ghana, on Saturday, September 23, 2017, emerged victorious in its three-year-long maritime boundary dispute with Cote d’Ivoire at the ITLOS.

The Special Chamber of the ITLOS constituted to hear the dispute unanimously declared that Ghana had not violated Cote d’Ivoire’s sovereign rights with its oil exploration activities.

It also held that Ghana was not financially obligated to Cote d’Ivoire with respect to those activities to give rise to the issue of reparation (compensation).

Addressing chief executive officers (CEOs) in the upstream and the downstream petroleum sectors of the economy at the maiden CEOs Forum in Accra on Wednesday, Mr Agyarko said the decision had greatly inured to Ghana’s benefit.

The forum

The forum was aimed at, among other things, assisting in monitoring and evaluating the efficiency and effectiveness of policies and directives from the ministry, with a view to collectively discussing critical success factors and targets of the sector.

The purpose of the maiden forum was to provide the platform for performing CEOs to exhort themselves on the scope of the new petroleum policy, set annual targets and goals, identify potential debilitating challenges and devise strategies to mitigate them.

 “As a sector, we will build synergies and collaborate among the various institutions to achieve the aspirations and visions of the government that fall under the ambit of the petroleum sector,” the minister said.    

Upstream plans

Highlighting the vision and goals for the sector, he said: “With regard to plans for the upstream sector this year, the ministry will pursue aggressive basin promotion, especially in the Central, Eastern, outer continental shelf and Voltaian basins to attract competent companies, particularly majors, into these basins to increase exploration activities.

“Commercial discoveries from such exploration will not only increase the country’s reserves but also create the needed jobs and significantly increase revenue to the state,” he said.

Mr Agyarko further indicated that the ministry intended to implement open and transparent public competitive tender processes in the award of petroleum blocks.

“It is our target this year to conduct the first bidding rounds for the award of exploration and production rights to successful companies,” he said.

He, therefore, urged the Ghana National Petroleum Corporation (GNPC) and the Petroleum Commission (PC) to work hard to realise the set targets to improve on investor confidence in the petroleum sector.

A third agenda the ministry intended to pursue this year, he said, was the promotion of the development and commercialisation of indigenous gas resources.

“The ministry considers the gas industry as a major catalyst to the country’s industrial transformation and, as such, no stone should be left unturned in realising this dream.

“Recommendations from the Gas Master Plan Implementation Committee, on which all the CEOs are represented, will be forwarded to the Cabinet for approval and implemented to the letter,” he said.

Downstream sub-sector

The downstream sub-sector, if well managed, Mr Agyarko said, would be what he termed the major game changer in the socio-economic development of the country.

He said the ministry would be advancing the establishment of a petroleum hub, which was one of the government’s strategic anchor initiatives that would serve as a new pillar of growth in the Ghanaian economy.

The project, he explained, would accelerate the growth of Ghana’s petroleum downstream sub-sector and make it a major player in the economy.

 “The petroleum hub project will increase the presence of major international oil trading and storage companies, create regional trading champions and encourage joint ventures between local and international companies for foreign direct investments, technology and knowledge transfer and wealth creation,” he said.

 LPG policy

Touching on the implementation of the LPG policy, the minister said the government realised the need for a policy to promote LPG and further aggressively pursue an increase in access towards the goal of 50 per cent access by 2030.

 “The policy is to also provide direction and a framework for safety legislation and operational standards in the industry,” he said.

Mr Agyarko reiterated the government’s unending commitment to churn out the maximum benefits from the oil and gas industry to the good people of Ghana and generations yet unborn.

“This, I strongly believe, can only be achieved through a sustained and coordinated exploitation of the country’s hydrocarbon resources and the prudent management of the downstream sub-sector.

“I am confident that at the end of this forum, we will all leave here with a clearer sense of direction for the effective and integrated development of our oil and gas endowment to play its pivotal role of transforming Ghana’s economy into a middle income status,” he added.

Denial

Reacting to claims by the Minority Spokesperson on Energy, Mr Adam Mutaawakilu, that the government had not made any proposal to the Public Utilities and Regulatory Commission (PURC) for a reduction in electricity tariffs but that there was rather a pending tariff increment, the minister said it was unfortunate for such a claim to be made.

According to him, there was, indeed, a proposal, which had since been responded to by the PURC.

Mr Agyarko challenged the media to get in touch with the PURC to find out the correspondence between the ministry and the commission.

NPA denies increment

Answering questions on the allegation of increment in the prices of petroleum products by four per cent, the CEO of the National Petroleum Authority (NPA), Mr Hassan Tampuli, denied the claim and said it was a single oil marketing company, out of more than 100, which increased the prices of fuel products in the last pricing window.

He indicated that the increment was within the approved indices in the pricing window.

He further indicated that the NPA and other stakeholders were in consultation with countries that were currently implementing Ghana’s intended gas policy.

Mr Tampuli said a final paper would be put together for the final implementation of the gas policy.